Tampa Bay consumers are on track to spend more than $46.3 billion at retail this year, based on projections by the National Retail Federation (NRF). Spending is expected to be 13.5% higher than last year.
Some Tampa Bay small business owners, though, are wondering if the spread of the Delta Variant may slow spending if consumers sense pressure on their own financial security. Shoppers, however, don't see it that way.
New research from Nielsen indicates that 82% of consumers believe their household finances will either remain the same or improve during the upcoming months.
The Nielsen study has another finding that Tampa Bay business owners will find promising. Consumers are more likely to shop locally than they did before the onset of the pandemic, although in different ways.
Today, says Nielsen, 81% of consumers are making purchases in stores. Prior to the pandemic, however, only 75% said they were shopping in-store. Also, shoppers are now using local stores' curbside pick-up, delivery, and call-ahead options much more often than they did before COVID-19.
One thing that hasn't changed during the pandemic. Advertising on Tampa Bay radio is still the best way to reach these consumers who expect to buy from local businesses.
Every week, Nielsen reports that 2.2 million consumers tune-in to Tampa radio stations. This is more than use local TV, cable, newspapers, social media, or streaming audio and video.
When a Tampa Bay business owner advertises, reach is critical to the success of a campaign.
In a study of advertising effectiveness, Nielsen discovered the elements of a campaign that had the most potent effect on purchase behavior. The results indicate that reach (the number of different consumers exposed to a campaign) was responsible for driving more sales for the advertiser than branding, recency, context, or targeting. Only the content of the ad had a greater effect.
Many business owners have limited advertising budgets and can only afford to invest their marketing dollars into one medium. By using Tampa Bay radio, though, an advertiser is able to also reach a vast majority of consumers who spend time with local TV, cable, and social media.
Most, importantly, consumers who hear radio commercials respond to advertising messages.
A study conducted this year by Edison Research and NPR found that 50% of consumers who were exposed to radio commercials indicated that they were compelled to gather more information about a company, product, or service. Thirty-six percent of listeners said they were convinced to buy a product after hearing a radio commercial.
Radio's ability to reach and motivate local shoppers to buy is the reason the medium provides advertisers with a strong return-on-investment (ROI).
Over the past few years, Nielsen has conducted more than 20 studies to determine how many additional dollars in sales could be achieved for every dollar invested in radio advertising. On average, the businesses studied generate $10,000 in sales lift for every $1000 spent. The ROI, therefore, was of 10-to-1.
Between April 30 and May 27 of 2020, the darkest days of the pandemic, Nielsen analyzed the sales results of a retailer who conducted an advertising campaign during that period using both radio and TV.*
According to Nielsen, people exposed to only the retailer's radio commercials represented 20% of all advertising impressions. However, these same consumers were responsible for 42% of the sales increases.
As a result, the retailer earned a $28,000 increase in sales for every $1000 spent on radio. A 28-to-1 return-on-advertising-investment.
AdAge, a trade magazine for advertising professionals, calls these types of returns "eye-popping." The magazine goes on to say radio's ROI is superior to commercials on TV, online, and social media.
Here's the bottom line for Tampa Bay business owners:
- Retail shopping in Tampa Bay is on track to hit record levels this year
- Shoppers are spending more money now in-store than they were pre-pandemic.
- Advertising is crucial to a business owner's ability to compete for a fair share of the expanding pool of retail dollars.
- Local radio provides the strongest ROI among available advertising options.
*Study commissioned by Cumulus | Westwood One
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